Correlation Between Tema ETF and BNY Mellon
Can any of the company-specific risk be diversified away by investing in both Tema ETF and BNY Mellon at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Tema ETF and BNY Mellon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tema ETF Trust and BNY Mellon ETF, you can compare the effects of market volatilities on Tema ETF and BNY Mellon and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Tema ETF with a short position of BNY Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tema ETF and BNY Mellon.
Diversification Opportunities for Tema ETF and BNY Mellon
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tema and BNY is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Tema ETF Trust and BNY Mellon ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNY Mellon ETF and Tema ETF is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Tema ETF Trust are associated (or correlated) with BNY Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNY Mellon ETF has no effect on the direction of Tema ETF i.e., Tema ETF and BNY Mellon go up and down completely randomly.
Pair Corralation between Tema ETF and BNY Mellon
Considering the 90-day investment horizon Tema ETF Trust is expected to under-perform the BNY Mellon. In addition to that, Tema ETF is 25.55 times more volatile than BNY Mellon ETF. It trades about -0.03 of its total potential returns per unit of risk. BNY Mellon ETF is currently generating about 0.55 per unit of volatility. If you would invest 4,463 in BNY Mellon ETF on August 27, 2024 and sell it today you would earn a total of 506.00 from holding BNY Mellon ETF or generate 11.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 78.43% |
| Values | Daily Returns |
Tema ETF Trust vs. BNY Mellon ETF
Performance |
| Timeline |
| Tema ETF Trust |
| BNY Mellon ETF |
Tema ETF and BNY Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tema ETF and BNY Mellon
The main advantage of trading using opposite Tema ETF and BNY Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tema ETF position performs unexpectedly, BNY Mellon can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BNY Mellon will offset losses from the drop in BNY Mellon's long position.| Tema ETF vs. Smith Nephew SNATS | Tema ETF vs. Fresenius Medical Care | Tema ETF vs. Fomento Economico Mexicano | Tema ETF vs. The Cooper Companies, |
| BNY Mellon vs. SPDR SSgA Ultra | BNY Mellon vs. SPDR Bloomberg Barclays | BNY Mellon vs. American Century ETF |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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